The recent COP26 summit in Glasgow brought the full focus of the world’s media on to the topic of climate change and the need for all of us to operate more sustainably. The message that emerged was clear: without immediate and concerted action, the future of our planet is bleak, and businesses must lead the way in helping to develop solutions.
This common perception is also echoed by the findings revealed at the UN Global Compact Leaders’ Summit, which showed that 50 per cent of companies globally say that supply chain sustainability has grown in importance since the Covid-19 pandemic.
For many organisations, this means ensuring that items are produced and sourced responsibly, drawing on a supply chain that is committed to operating in an environmentally sustainable and morally responsible fashion.
At the heart of this is traceability: the ability for brands to demonstrate to consumers, shareholders and investors just where products – and individual components of these – have come from, enabling them to comply not just with ever-tighter regulation but also with the demands of society and an increasingly ethically and environmentally conscious public.
“To take action on something, you have to be able to measure and monitor it,” says Max Winograd, VP, atma.io and Connected Products, Avery Dennison Smartrac. “We’re seeing a tremendous amount of activity around trying to measure what’s actually happening today, then monitoring it and taking action to reduce carbon emissions.”
Having clear visibility over a supply chain has become even more important due to the pandemic, which disrupted many organisations’ operations. Covid-19 interrupted the manufacture of vital components, shipping routes and port capacity, as well as causing inflationary pressures and supply shortages. In the UK, the problem was compounded by Brexit, which led to serious labour shortages in many sectors, including manufacturing and logistics. Being able to identify exactly where items are at any point in time and when they are likely to arrive can help organisations respond to any challenges and implement strategies to help avert any crises.
Until recently, though, implementing effective traceability has proved difficult.
“Since the 1970s, the fashion industry has essentially outsourced all production across vast geographies,” says Jason Kibbey, CEO of technology platform Higg. “As a result, the supply chain has been highly disaggregated. Until about 10 years ago, most companies didn’t even know the makeup of the various components of their supply chain. Collecting information meant either embarking on a very expensive exercise or a deep amount of collaboration and trust among every aspect of that value chain. There just weren’t the resources or availability of information to do that.”
As a result of this lack of supply chain visibility, poor practice has been able to continue, with devastating results for the planet.
Now, though, things are starting to change. atma.io is the vision of Fortune 500 global materials science company Avery Dennison, aiming to connect the physical and digital worlds by assigning unique digital IDs to everyday items.
“Atma is Sanskrit for the word “soul”, and the idea is that a soul is something that persists throughout a life’s journey,” explains Winograd. “If you think about the soul of a product, it’s a unique identity and you can learn what has happened throughout the product’s lifecycle. With that information, you’re then able to learn from the product, find out how it’s made and what it’s made of, discover how to give it a second life or extend its life and find out how to authenticate its impact on the world.”
The digital identity serves as an initial “snowflake” in a snowball of data, says Winograd, which collects more data throughout the lifecycle. “It gets data from every step of the supply chain, from raw materials through to purchase and then every time consumers interact with it,” he says. “It’s another touchpoint to communicate with the consumer, but it also allows brands to understand how consumers are interacting with products. That then helps brands make more sustainable decisions around how they design products and how they enable circularity.” The data itself is stored in a connected product cloud, he adds, with more than 16 billion physical items already on the platform and 300 new onesbeing added every second.
As well as helping businesses monitor the carbon footprint and sustainability characteristics of products, such clarity of information can help build closer ties between brands and their customers. “Brands want to be able to have a more personalised experience and engage with their consumers,” says Winograd. “They want to be able to connect with the consumer post-purchase in new and unique ways and ultimately build more loyalty and trust.”
“There’s also a desire to use that item-level information to get a more granular view of what’s happening in their supply chain. That might be identifying bottlenecks or realising when certain products from certain factories are driving higher recalls or returns and then being able to act quickly when there is an issue. It helps the brands minimise any wasted costs related to those operational and management issues.”
The platform is already attracting interest from a wider range of businesses and sectors, including the apparel and fashion, food, beauty and pharmaceutical industries. “We are privileged to work with six of the top 20 apparel brands globally by revenue and four of the top 10 quick-service restaurants,” says Winograd. “With those customers, we have a mix of different use cases around connected products.”
atma.io has taken steps to ensure the information contained about products is accurate. “We have a couple of different ways to ensure trust in the platform,” says Winograd. “Analytics are a core part of what we offer so, for example, if something happens that goes against what would be considered a typical flow of a product, we can accurately identify where there could be an outlier or an alert, relative to things such as diversion, duplication or an illegitimate product, so we can augment existing brand protection strategies.” atma.io also works with a number of blockchain partners to provide encryption for the data and the use of a distributed ledger, which can provide a second layer of verification, he adds.
atma.io has recently partnered with Higg, the sustainability insights platform, which allows consumer goods companies to measure, manage and share the social and environmental impacts of their full value chain. “We created the Higg platform several years ago because we recognised that apparel and footwear value chain needed trusted technology to scale standardised measurement if the industry wanted to see significant progress,” says Kibbey.
“Every company built their own code of conduct and independent infrastructure and it didn’t create an environment of collaboration, which is required for continuous improvement. There was a strong desire to look at how we could measure and share data differently and at scale for the whole industry.”
Partnering with ecosystems such as atma.io makes sense, he says, to help create an open exchange of data and create a critical mass of organisations using the platform. Higg operates a network of 45,000 users, 500 brands and retailers and tens of thousands of manufacturers’ factories, all of which will now benefit from atma.io’s capabilities.
With more pressure on businesses to demonstrate their credentials than ever before, and to build up closer relations with customers, Winograd believes organisations cannot afford to delay. “Once you begin to put digital triggers on individual products, you can start to understand how efficient your supply chain is from a sustainability and carbon footprint perspective and take action,” he says. “It’s about thinking where you want to be in five years’ relative to any pledges and working out what action you need to take today to get there. The time for action is now.”
To find out more about how atma.io can help you take action on sustainability, visit atma.io.